Early in vertebrate embryonic development, cell-cell signaling plays important roles. We are interested in the mechanistic understanding of Wnt and hedgehog signaling pathways in the control of vertebrate embryonic development, in particular, limb development and skeletal morphogeneis. Early in limb development, signaling molecules which include the Wnt and hedgehog family members determines where and when the late structures, ie, skeletal elements will form. Skeletal morphogeneis in the limb occurs through endochondral bone formation in which chondrocytes (they form the cartilage) and osteoblasts (they secrete bone matrix) are first differentiated from mesenchymal condensations. This is followed by sequential proliferation and maturation of both chondrocytes and osteoblasts, which are tightly regulated and coordinated to ensure proper morphogenesis of the skeletal system. Through analyzing mutant mice in which Wnt signaling components are either inactivated or ectopically expressed, we have found that Wnt5a, in contrast to many other Wnts, signal through a novel pathway to antagonize the canonic Wnt pathway in regulating embryonic development and possibly in suppressing tumor formation.In addition, we have found that several Wnt genes are expressed in overlapping and complementary patterns in the developing synovial joints, where beta-catenin protein levels and transcription activity were up-regulated. We demonstrated that that Wnt/ beta-catenin signaling pathway is both necessary and sufficient to induce early steps of synovial joint formation. Furthermore, we found that the Wnt/ beta-catenin signaling pathway also controls the differentiation of osteoblasts and chondrocytes from mesenchymal progenitor cells. Wnt/ beta-catenin signaling pathway is also essential in the regulation of chondrocyte hypertrophy. Our results indicate that by manupilating the strength of the Wnt/ beta-catenin signaling, it is now possible to direct the differentiation of progenitor cells and stem cells along only the chondrocyte or osteoblast lineage. Our research work demonstrated that the Wnt/ beta-catenin signaling pathway is a critical target for the therapeutic development of both osteoporosis and osteoarthritis.